How Iceland is already using its wellbeing framework in tackling the Covid-19 crisis

By Kristin Vala Ragnarsdottir

This week a friend and colleague sent this written dialogue to me: 

World: “There´s no way we can shut everything down in order to lower emissions, slow climate change and protect the environment.“

Mother Nature: “Here´s a virus. Practice.“

 

For decades, nations have taken up and practiced a globalised, neoliberal, market-driven economic system with focus on exponential economic growth through natural resource extraction, production with energy use and consumption.

Global natural systems are similarly in exponential decline and the climate is warming exponentially. Despite the 2015 UN Climate Agreement, global emissions were still rising exponentially in 2019.  Few people appear to have listened to physics professor Al Bartlett who often stated that „the biggest imperfection of mankind is that it does not understand the consequences of exponential growth.“  Interestingly, the late economist Kenneth Bolding stated: “anyone who thinks that endless growth in a limited world is possible, is either a madman or an economist.“  For the past decade I have asked university student groups and the public whether they can tell me the doubling time if they know the percent rate of increase, and in my memory only one engineering student knew the answer.

Enter the Covid-19 virus. A global pandemic is declared and in only a few weeks the world has ground to a halt, literally.  Varied civil protection measures for emergency management have been taken across the world, including closing borders.  Testing, isolating, quarantining, treating is the message from WHO. Some nations stepped in with social restrictions early, others later.  It appears that the aim of “flattening the curve“ of peak diagnosis per day so that the health care system will not be overwhelmed, appears to be working in some countries.

Meanwhile, in parallel, the economy has slowed down dramatically across the world.  World GDP growth is unlikely for 2020 and at the same time total levels of pollution and emissions are likely to decrease.

Like all of us, I am deeply saddened by the world health pandemic and feel for those who have already and will lose their loved ones. Since the beginning of this crisis I have, however, observed several positive outcomes for science, the environment and the economy – which we can all benefit from in the future:

  1. More and more people now understand the terms „exponential growth“ and „doubling times“. National government representatives report daily increase in diagnosed Covid-19 cases and how many days it will take the cases to double.  This understanding can in due time be used by address issues relating to both the environment and the economy.
  2. The importance of trust in scientific knowledge has increased. Even populist politicians are now listening to scientists. Dismissal of scientific evidence is thus out, science is in. Even my 8 year old nephew has come up with a Covid-19 virus treatment proposal, which he discussed with my son today who is a medical doctor and research scientist. It is likely that many children will aim to be scientists in the future, filling the current and imminent gaps of lack of scientists and engineers.
  3. Wellbeing of people is the top priority of many government and industry responses. Hi-tech firms from race-car producers to vacuum cleaner manufacturers are being asked to step in to develop and produce in record time ventilators for the overwhelmed health care authorities. Governments are also stepping in to ask companies to produce soaps and other sanitary products and pharmaceutical companies are working with government scientists to develop corona virus vaccines.
  4. Since I am in Iceland I would like to outline the government of Iceland‘s economic rescue package which was introduced last weekend. Before I do that I would like to emphasise that my government is a partner in WEGo (Wellbeing Economies Governments) in partnership with Scotland and New Zealand – all three nations lead by women.

The Icelandic stimulus package is in 10 parts and is a total of 230 billion Icelandic krona, 7.8% of national income. The focus is on Prevention – three actions to prevent job losses and business bankruptcies; Protection – three actions to support individuals and and families due to difficult circumstances; Economic push back – four actions to increase economic activity, goods exchange and investment.  These are further outlined below – and where appropriate are linked with the newly established wellbeing indicators (WBI) that are being implemented in Iceland. These are 39 indicators, 17 related to society, 7 related to the environment and 15 related to the economy.

Prevention:

1) Part time pathway – unemployment benefits for those who have reduced employment percentage.  This supports economic WBIs on employment rates, unemployment and low income rates

2) Bridging loans to businesses – support for businesses that have operational difficulties to take extra loans as well as reduction in banking taxes. This can be related to economic WBI on debt of business

3) Deadline for business tax payments delayed – delay in tax due date, as well as insurance due date, and delay in due date for prepayment of business income tax. This relates to economic WBI on government debt.

Protection:

4) Salary during quarantine – employers are compensated for the salaries of people who are in quarantine and cannot work remotely from home. This relates to economic WBIs on buying power and individual debt

5) Increase in child support payments – single extra child support payments to families of every child under 18 because of changed circumstances. This relates to economic WBI on lack of social of economic quality

6) Withdrawal of private pension savings – allowance to withdraw private pension savings for unrestricted use. This relates to economic WBI of purchasing power.

Economic push back:

7) Strengthening tourism – internal injection for tourism (electronic vouchers for every citizen to travel in Iceland), abolition of overnight hotel taxes, and international promotion of Iceland as a tourism destination as soon as the crisis is over. This relates to national income which is one of the economic WBIs.

8) Extension of „everyone works“, refund of value added tax for home improvement and that of NGO facilities. This relates to the WBI of percentage in employment and unemployment.

9) Easier import/export – cancellation of import tax and delay in deadlines for paying customs fees. This relates to economic WBI of purchasing power.

10) Investment efforts – increase jobs in building and maintaining infrastructure, support business innovation, and accelerating planned investment for the future. This relates to economic WBI of percent employed and unemployment.

This quick analysis of the economic stimulus package of the Icelandic government can be directly related to 8 out of 15 economic WBIs.  None of the social or environmental WBIs can be directly related to the package. For the environment WBI a focus on accelerating land reclamation and tree planting and increasing nature protection would both create jobs and improve wellbeing for people and nature.  A focus on supporting remote education and would affect social WBI pertaining to education level and continuing education.

The Icelandic government has already started to think about the long term even as it deals with this short term crisis, thanks to its wellbeing indicator framework: but there‘s much more work ahead. It is my hope that many of the lessons we learn during this Covid-19 pandemic will bring us closer together and that we can use lessons learned to both protect the environment and build economies with focus on wellbeing for people and nature.

Dr. Kristín Vala Ragnarsdóttir is Professor of Sustainability Science, Faculty of Earth Sciences at the University of Iceland. She is also a WEAll Ambassador and a member of the WEAll Global Council.

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